February 2012

August 06, 2010

How Social Media Transform Branding & Marketing

I’m currently rewriting the chapter
on branding and marketing for a second edition of The Leader’s Guide to Storytelling (Jossey-Bass, 2005), which will be
issued in February 2011. It’s amazing
how different the scene looks today.

In the 20th Century, a
key role of marketing was to craft and deliver messages that communicated the brand. In the
21st Century, the more important role of marketing is to ensure that
customer stories enhance the brand.

Consider the following examples.

In 2008, when United Airlines broke
Dave Carroll’s guitar, he made a singing YouTube video that told the story of
the incident; the video has now been viewed by more than 8 million people.[1]

In 2008, when a mother took offence at
a commercial for the pain reliever Motrin that implied, in her eyes, that
mothers were wearing baby slings simply to be fashionable, she was able to
launch a “Motrin Moms” protest movement, that within two days became the most
popular subject on Twitter.[2]

In 2008, when Howard Schultz came back
to be CEO of Starbucks, he woke up one morning to find around a hundred emails in
his inbox. It turned out that this was the result of a sensational story in the
Sun newspaper in London about something Schultz had never heard of: “the dipper
well”. When his phone rang and a reporter asked him to comment, Schultz replied
that he had no idea what it was. The reporter advised him, “Google Starbucks real
fast!” Schultz recalls: “We had a real problem. The lesson was that the world
had changed. Something that happened in London had created a world-wide story
that positioned Starbucks with venom and disrespect.”[3]

These are just a couple of eye-opening
illustrations of the revolution generated by sites like Twitter, Facebook and YouTube.
As a result, stories told by customers can instantly trump the marketing
stories being told by organizations about their products and services. The
scale and rapidity of the ensuing public relations crises are astonishing.[4]

At the same time, the positive opportunities
for organizations to use the power of social media for telling the story of
their products and services are equally dramatic:

Procter & Gamble has used social
media to reach otherwise unreachable customers when they helped create a
community for teenage girls (beinggirl.com) that provide a friendly and helpful
environment for them to converse and share stories, where the girls also learn about
P&G’s feminine care products.[5]

Ford has used social marketing to
launch a new car—the Fiesta—without traditional advertizing by generating a
massive “Fiesta Movement,” involving stories reflected in 6 million YouTube
views, 740,000 views of Flickr photos and 3.7 million Twitter impressions.[6]

Since 2005, when the first edition
of The Leader’s Guide to Storytelling
(Jossey-Bass) was published, the dynamic of branding and marketing has been transformed.
In 2005, the examples cited above could not have happened. Facebook and YouTube
had only just been created and Twitter did not exist. Now in 2010, these three
websites have hundreds of million of participants, who can and do tell stories
about the products and services that they use.

The ability to understand and use
the power of story to defend against threats and to take advantage of opportunities
offered by social media has now become a core organizational competence.

Marketing in the 20th century

For much of the 20th Century,
branding and marketing operated very differently. They consisted mainly of crafting
and communicating one-way messages to a mass audience. By mass-marketing the
same product in roughly the same way to all consumers, companies could reach
the largest potential market at the lowest cost. Moreover organizations could
interrupt whomever they wanted with any message they cared to transmit. And
buyers were forced to watch it because there were only three television
channels.

Four fundamental changes help
explain why this model is no longer operative.

One is the fundamental shift in the
balance of power in the marketplace from sellers to buyers. By and large, the
established twentieth-century firm was in control of the marketplace. But the
situation changed. A few sellers turned into many sellers. Buyers acquired instant
access to reliable information. As a result, unless customers are receiving a
continuously added value from the firm, they can—and will—go elsewhere.

A second change is technological.
Word of mouth was relevant but not important. The accepted maxim was that every
unhappy customer told ten friends. Social media make it wonderfully—and
frighteningly—easy for anyone to communicate instantly with anyone else in the
world about anything. Now a dissatisfied customer can reach millions of
interested fellow-customers. Employee stories about a firm are publicly
available on sites like www.glassdoor.com. Customers can band together and use
stories to rapidly form alliances that can work powerfully either for—or
against—an organization.

A third change is social. Customers
are no longer docile pawns that can be manipulated at will with one-way
messages sent by oligopolies. Customers are skeptical about the stories they
are being told. Now customers are able to exploit the power of the new
technology to obtain information, address problems and tell stories so as to get
what they want. The 21st Century customer is a very different—and more
elusive—animal than the customer of fifty years ago.

A fourth big change is the consequence
of the other changes: the diminished effectiveness of corporate storytelling
through advertising. “Advertising has no credibility with consumers, who are
increasingly skeptical of its claims and whenever possible are inclined to
reject its messages.”[7]

These changes require a revolution
in how branding and marketing are conducted. They raise issues, not just about
particular management practices, but with the very notion of how should an
organization should be run.

Thus traditional management theory
holds that communications from the firm with the outside world are made through
official channels. The firm operates through a system of barriers, clearances and
controls that ensure that only the right messages are sent. Communications are essentially
conceived as one-way.

The thinking is linear and abstract.
The firm creates a brand idea, through selecting the right name, the right logo,
the right packaging and deploys the right advertising to communicate the
firm’s messages. The brand idea thus communicated leads to certain customer
perceptions about the brand. These perceptions in turn lead to customer
behavior, i.e. the customer buys the firms products or services. This in turn generates
satisfactory business performance.[8]

The most frequently cited success
story for this way of thinking is Coca-Cola. Through the use of an unusually
shaped bottle, consistent deployment of a certain shade of the color red, and
clever marketing to communicate the implausible stories that Coca-Cola’s
beverage is based on “a secret formula” kept in a locked vault, and that it
constitutes “the real thing”, the firm has created a brand worth tens of billions of
dollars, despite the fact the underlying product—a brown carbonated beverage—is
not outstanding, even in the firm’s own blind tasting tests.

In the 21st Century,
Coca-Cola found difficulty duplicating the success.[9]

In the spring of 2004, Coca-Cola
decided to launch a brand of water called Dasani in the United Kingdom with a
£7 million marketing push that told the story how Dasani comprised “pure water”
having been cleansed by a “highly sophisticated purification process, based on
NASA spacecraft technology.”

The launch ran into some snags. First,
it emerged that the water used in Dasani came from ordinary tap water, piped
into its U.K. factory by Thames Water, leading to widespread public derision.

This was then compounded by news that
the firm’s “highly sophisticated purification process,” was in fact the same
reverse osmosis used in many modest domestic water purification units.

Then the story took an even worse
turn: it emerged that the entire U.K. supply of Dasani was being pulled off the
shelves because it had been contaminated with bromate, a cancer-causing
chemical.

The Drinking Water Inspectorate
confirmed that the water supplied to the factory by Thames Water was free of
bromate. In other words, Dasani was less healthy than regular tap water,
despite being sold at more than thirty times the price. As a result, the
company shelved plans to launch a natural mineral water version of Dasani in
Europe.

In the 20th Century,
Coca-Cola might have gotten away with this implausible storytelling and might
have successfully launched the brand to a docile consumer base. In 2004, the
stories were quickly identified as deceptive and the brand launch failed.

21st Century marketing

The new world of social media not
only demands greater honesty from organizations but also more openness. Customers
prefer to do business with organizations that understand and anticipate their
needs, are willing to interact with them and consistently delight them. And
they have the wherewithal to obtain the information needed to achieve that.

Apple is an example of an
organization that is largely operating in this manner:

The most powerful aspects of the
customers’ experience with Apple are not confined to the logo, the name, the
packaging or or the advertising. Stories are generated by the products
themselves—iMac, iPod, iPhone and iPad—and by the environment of the Apple
stores that encourages you to stay, explore and interact with its products and by
the ingenuity of its offerings and their simplicity of use. The helpfulness of
their sales people both in person and on-line reinforces the impression, as do the
enthusiastic stories that potential customers hear from other Apple users. The whole
experience generates a seamless set of stories that spread virally conveying
the central idea: Apple products are cool.

A radical change in how firms are managed

Marketing in the 21st
Century is thus less about crafting a set of messages that communicate the
brand, as it is about creating products and services that themselves generate
authentic stories by delighted customers, who share the stories with other
potential customers.

In the 20th Century,
branding and marketing comprised linear one-way messaging aimed
at manipulating customers into buying the firm’s products. Many established firms
are still run in this fashion.

Branding and marketing in the 21st
Century are complex, interactive and multi-directional. Firms being run in a
traditional, command-and-control manner will not be sufficiently agile to cope.

Thus social media won’t by itself
change management. But social media will make it difficult to run organizations successfully
with traditional management. Organizations that don’t change will tend to fall by the
wayside.

Business leaders now face the
challenge of orchestrating a shift from one way messaging that seeks to
manipulate customers to communications that create interactive relationships
with thinking, feeling, caring human beings. In many cases, this will require
new processes, new structures, new systems and new managerial skills. In
effect, it will require radically different management.

Comments

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I'm the coordinator of a mentoring program of and for federal employees. Your article caught my eye as our most recent workshop was on creating yoru personal/professional brand. Next month's workshop will be on storytelling -- as a mentoring and networking tool. Any suggestions?

Hi Sue--Storytelling can be used for a wide array of organizational purposes, as my books, articles and blogs point out. So a first step is to set priorities. What do you want to accomplish with storytelling? You could do an overview of the varied possible purposes. Or you could pick a particular area, ie. sparking change and focus on that. Happy to chat further by email: steve#stevedennig.com.

Hi, A Chinese trend is the "human flesh search", easy to find on google. They can use the web to hunt one down, all aspects of one's life ignoring privacy, then destroy one's life. It appears that the President of the Sunmoon education company in Shenzhen is being hunted now. He may be able to buy off his female staffer who incited the hunt.

Social media is critical to the success of today’s businesses. We really can’t deny the fact that businesses are testing out Twitter and other social networking sites as part of their steps into the social media landscape. Anyways, thanks for sharing this post!